Could 2023 Social Security COLA hit 9%?

For millions of Americans, Social Security is their primary source of retirement income. Your budget will be destroyed by today’s high inflation rates the more you depend on Social Security for retirement income.

The only silver lining is that strong inflation may result in Social Security recipients receiving a larger-than-normal increase in their cost of living allowance.

COLA vs. Social Security

The yearly cost-of-living adjustment (COLA) for Social Security may grow to 9% or more in 2023 due to inflationary pressures, a historically significant increase that, if history is any indication, will still leave recipients with less spending money.

Nevertheless, the chance of a more significant COLA increase in 2023 has increased due to the acceleration of inflation. The Consumer Price Index (CPI) increased by 8.5% in March compared to the prior year, which is the highest increase according to the US Department of Labor.

However, as indicated by the present high inflation data, annual COLA increases are not always helpful in assisting seniors in covering expenses. Frequently, the increases are calculated long before they are seen in beneficiaries’ Social Security benefits.

Why COLA may Hit 9%

Problems worsen when more money is spent on essential categories like food, housing, home heating, and prescription drugs. The standard Medicare Part B premium also increased for some years by 14.5%.

It’s certainly possible that inflation will go below 9%, leading to a smaller COLA since it won’t establish the COLA for the next year until 2022.

How many will Social Security recipients see an increase in 2022?

The COLA for Social Security beneficiaries in 2022 will be 5.9%. Even though this substantial rise seems to be welcomed, it is small when compared to the prices of numerous items that seniors must buy. The three main problems that worry me are housing, food, and healthcare.

What will the COLA for Social Security be in 2023?

Prices have increased by an astounding 8.5% over the past 12 months through March, according to the most current Consumer Price Index (CPI) data. 

Since Jan ’82, the year-over-year inflation rate has been the highest. We are boosting interest rates to combat stagflation in the 1970s when Ronald Reagan was president.

Is it conceivable that the Social Security COLA in 2023 could reach 9%?

Regarding their financial resources and purchasing power, baby boomers have not readily moved to retirement status. Social Security policy expert with the Senior Citizens League, the purchasing power of Social Security benefits for seniors who retired before 2000 has decreased by 40%. The organization’s 2022 Social Security Loss of Buying Power Study shows the most severe decline in purchasing power since the survey’s inception in 2010.

The research claims that this year’s high inflation caused a 10-point depreciation. Among 10 average senior expenses, home heating oil and gasoline prices have increased significantly since March 2021, by 79% and 51%, respectively. 

Also, the cost of food and the Medicare Part B premiums have increased recently. The current estimate of the Social Security cost-of-living adjustment (COLA) for 2023 is around 8.6% based on data on consumer prices. Definitely, by 2023 social security could hit 9%

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